90-109 | Virginia Tax

Tax Type

Retail Sales and Use Tax

Description

Scrap metal

Topic

Exemptions

Date Issued

07-23-1990

July 23, 1990

Re: Request for Ruling/Sales and Use Tax

Dear ****

This will reply to your letter dated June 12, 1990 in which you request a ruling on the applicability of the sales and use tax to the sale of "scrap" by your client to another company.

RULING

Virginia Retail Sales and Use Tax Regulation 630-10-63 A provides that the retail sales and use tax does not apply to various types of tangible personal property "when used or consumed by an industrial manufacturer or processor of products for sale or resale" including:

- [i]ndustrial materials for future manufacturing or processing into articles of tangible personal property for resale where such industrial materials either enter into the production of or become a component part of the finished product.

Thus, in the instant case, assuming the "scrap" sold by your client is for "future manufacturing or processing..." by an industrial manufacturer or processor of products for sale or resale, no sales tax should be charged. For your information, the department has previously ruled that the processing of scrap metal is an industrial activity entitled to the industrial manufacturing exemption set forth in Virginia Code §58.1-608(3)(b) provided the processed materials are for sale or resale.

If you have any further questions, please contact the department.

Sincerely,

W. H. Forst
Tax Commissioner

Rulings of the Tax Commissioner